A group of types of cryptocurrencies that you should know and pay attention to

When we talk about cryptocurrencies, we have to take into account a number of points. For example, if I told you that Bitcoin is a cryptocurrency, and Spacegrim is also a cryptocurrency (also a cryptocurrency), there is a big difference between them. Bitcoin can be classified into a specific type of cryptocurrency, as well as this last currency.

But in fact, there are many types of cryptocurrencies that you must pay attention to and know, so that you know when and how to invest in them, so follow with us this simplified explanation of the most important types of cryptocurrencies. Cryptocurrencies active on its own blockchain network are currencies through which a specific blockchain network was built, and then through the blockchain network a specific digital currency was created. They are digital currencies that are solid and strong in terms of price, and this is because the collapse of the digital currency is based primarily on the collapse of its blockchain network.

Also, any trades or financial transactions within this network take place via its digital currency. Therefore, the more popular the blockchain network is, and the more users it has, the higher the price of the digital currency. Among the most famous are: Bitcoin, Ethereum, and BNB.

Cryptocurrencies built on another blockchain network that is not affiliated with it. Because the field of cryptocurrencies in general is an open source field, and everyone can use it, you must also realize that a digital currency can be built without the need for your own blockchain. In this case, you can rely on a future-ready blockchain network. The price of these digital currencies varies according to the number of consumers within the blockchain network and its traders.

They may be currencies with high prices and values, and at other times they may be weak currencies in terms of price and progress, but they belong to another blockchain network. As examples of these currencies: We find Polkadot available in the Ethereum network. Or Chainlink, which is also built on the Ethereum network.

Or Tron, which is built on the Binance network. Tokens We previously explained the difference between a coin and a token (read the article here), and they are currencies that you should also know as well. Tokens are forks or shards built or borrowed from a cryptocurrency, not from a blockchain network.

In fact, the token may not belong to the blockchain network, in which case it is treated like a stock. Anyone can create their own Token, and it is considered a scam in the cryptocurrency space as a whole. A token is often linked to another cryptocurrency, meaning that as it increases, the price of the token increases and as it decreases, the price of the token decreases.

To be honest with you, investing in tokens is always a bad idea, because they can collapse overnight without any logical reason (the whales that supported the coin can all withdraw money at once and the coin collapses). Tokens always belong to a company, currency, or source, and if they are random, they are undoubtedly fraudulent. Example: GateToken of the Gate.io trading platform.

Or FTXToken affiliated with the FTX platform. Or KucoinToken, affiliated with the Kucoin trading platform.

Then finally...the Shitcoins!

Shitcoins are currencies created by people like you and me, and they may have different goals behind them. They may be honest, aspiring to advance, or they may be fraudulent, aspiring to steal your money. It is the worst type of cryptocurrency as a whole. Every day you may hear thousands of Shitcoins being created, and they even have strange names!

Such as Eloncoin (after Elon Musk) or BananaTok and others (these are real currencies, by the way). The problem with these digital currencies is that they rise and fall very quickly. It may rise by 300% in one hour, or it may fall by 1200% in just 10 minutes.

So it's hard to trust her. #Cryptocurrency and token articles are not investment advice. Trading and investing in digital currencies has very high risks compared to trading local stocks, so caution must be done#